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If you’re looking for a multi-bagger, there’s a few things to keep an eye out for. Firstly, we’d want to identify a growing return on capital employed (ROCE) and then alongside that, an ever-increasing base of capital employed. Put simply, these types of businesses are compounding machines, meaning they are continually reinvesting their earnings at ever-higher rates of return. So when we looked at the ROCE trend of Kencana Agri (SGX:BNE) we really liked what we saw.

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For those who don’t know, ROCE is a measure of a company’s yearly pre-tax profit (its return), relative to the capital employed in the business. Analysts use this formula to calculate it for Kencana Agri:

Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets – Current Liabilities)

0.24 = US$46m ÷ (US$290m – US$96m) (Based on the trailing twelve months to June 2025).

So, Kencana Agri has an ROCE of 24%. In absolute terms that’s a great return and it’s even better than the Food industry average of 13%.

View our latest analysis for Kencana Agri

Above you can see how the current ROCE for Kencana Agri compares to its prior returns on capital, but there’s only so much you can tell from the past. If you’re interested, you can view the analysts predictions in our free analyst report for Kencana Agri .

Kencana Agri is showing promise given that its ROCE is trending up and to the right. The figures show that over the last five years, ROCE has grown 107% whilst employing roughly the same amount of capital. So our take on this is that the business has increased efficiencies to generate these higher returns, all the while not needing to make any additional investments. On that front, things are looking good so it’s worth exploring what management has said about growth plans going forward.

As discussed above, Kencana Agri appears to be getting more proficient at generating returns since capital employed has remained flat but earnings (before interest and tax) are up. And with the stock having performed exceptionally well over the last five years, these patterns are being accounted for by investors. With that being said, we still think the promising fundamentals mean the company deserves some further due diligence.

Kencana Agri does come with some risks though, we found 3 warning signs in our investment analysis, and 1 of those is a bit concerning…

High returns are a key ingredient to strong performance, so check out our free list ofstocks earning high returns on equity with solid balance sheets.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Reinsurance Group of America (RGA) has captured investor interest after publishing its latest study estimating a 3.5% reduction in US mortality by 2045, attributed to widespread adoption of GLP-1 medications. This analysis offers fresh insight on long-term health trends shaping the insurance sector.

See our latest analysis for Reinsurance Group of America.

RGA’s fresh research on GLP-1 medications comes after their newly opened office in Midtown Manhattan, signaling both strategic growth and a strong operational presence. While the past year has brought a -17.1% total shareholder return, the stock has still delivered an impressive 82.9% total return over five years. This suggests that long-term momentum remains intact even if recent price action has softened.

If you’re interested in what’s working for other insurance and financials leaders, it’s the perfect time to check out fast growing stocks with high insider ownership.

With RGA’s long-term performance outpacing recent setbacks and its shares trading at a notable discount to analyst price targets, the key question is whether investors are overlooking future upside or if potential growth is already reflected in the current price.

The most closely followed narrative now sets fair value for Reinsurance Group of America at $236.89, well ahead of the last closing price of $188.71. The current fair value points to a significant gap in expectations, and sharp focus falls on what is driving confidence behind this premium.

The company’s leadership in digital underwriting solutions and customized reinsurance products, bolstered by data analytics and exclusive arrangements, enhances efficiency and pricing power, which is likely to improve net margins and generate higher earnings as these tech-enabled capabilities scale.

Read the complete narrative.

What secret sauce does this popular narrative see in RGA’s fundamentals? There is a quantum leap projected in profits, with digital and global expansion fueling surging margins. Want to know which assumptions are pushing its value to new highs? Uncover the blockbuster growth projections and hidden catalysts driving this valuation surprise.

Result: Fair Value of $236.89 (UNDERVALUED)

Have a read of the narrative in full and understand what’s behind the forecasts.

However, persistent volatility in U.S. life claims and rising healthcare costs could temper RGA’s projected earnings momentum, which may challenge consensus expectations.

Find out about the key risks to this Reinsurance Group of America narrative.

If you want to see the numbers for yourself and shape your own view, you can build your personal narrative in just a few minutes. Do it your way.

A good starting point is our analysis highlighting 5 key rewards investors are optimistic about regarding Reinsurance Group of America.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include RGA.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com

What are the early trends we should look for to identify a stock that could multiply in value over the long term? Typically, we’ll want to notice a trend of growing return on capital employed (ROCE) and alongside that, an expanding base of capital employed. Ultimately, this demonstrates that it’s a business that is reinvesting profits at increasing rates of return. So on that note, IFCA MSC Berhad (KLSE:IFCAMSC) looks quite promising in regards to its trends of return on capital.

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If you haven’t worked with ROCE before, it measures the ‘return’ (pre-tax profit) a company generates from capital employed in its business. The formula for this calculation on IFCA MSC Berhad is:

Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets – Current Liabilities)

0.14 = RM18m ÷ (RM154m – RM30m) (Based on the trailing twelve months to June 2025).

Thus, IFCA MSC Berhad has an ROCE of 14%. That’s a relatively normal return on capital, and it’s around the 13% generated by the Software industry.

View our latest analysis for IFCA MSC Berhad

Historical performance is a great place to start when researching a stock so above you can see the gauge for IFCA MSC Berhad’s ROCE against it’s prior returns. If you want to delve into the historical earnings , check out these free graphs detailing revenue and cash flow performance of IFCA MSC Berhad.

IFCA MSC Berhad’s ROCE growth is quite impressive. Looking at the data, we can see that even though capital employed in the business has remained relatively flat, the ROCE generated has risen by 5,779% over the last five years. So our take on this is that the business has increased efficiencies to generate these higher returns, all the while not needing to make any additional investments. The company is doing well in that sense, and it’s worth investigating what the management team has planned for long term growth prospects.

To bring it all together, IFCA MSC Berhad has done well to increase the returns it’s generating from its capital employed. And since the stock has fallen 21% over the last five years, there might be an opportunity here. That being the case, research into the company’s current valuation metrics and future prospects seems fitting.

One more thing, we’ve spotted 3 warning signs facing IFCA MSC Berhad that you might find interesting.

If you want to search for solid companies with great earnings, check out this free list of companies with good balance sheets and impressive returns on equity.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.